In a reversal of its earlier position, the Court declared the SEC’s rules valid and constitutional, affirming their role in upholding audit quality.
Covers only high-stakes audits
The accreditation requirement applies only to CPAs conducting statutory audits of “covered entities,” such as listed corporations, investment houses, and financing and lending companies.
The Court clarified that this rule does not regulate the entire accounting profession, which remains under the supervision of the Board of Accountancy (BOA). Instead, it sets higher standards for auditors reviewing financial statements that impact public trust and market confidence.
Aligned with global best practices
The Court emphasized that the practice of a profession is a privilege subject to regulation—not an absolute right.
Similar accreditation powers are granted to other financial regulators, including the Bangko Sentral ng Pilipinas (BSP) and the Insurance Commission.
The SEC’s guidelines were designed to align with international auditing and ethical standards and to ensure audit reliability in sensitive sectors.
Clear line between CPA roles
CPAs who do not perform audits for covered entities are not affected by the SEC’s accreditation requirement. The ruling is seen as a win for tighter governance and transparency in the Philippine financial system.
